Quality, access and financing in for-profit child care have long been a concern in Canadian Early Childhood Education and Care (ECEC). But until now, most Canadian child care businesses have remained relatively small, privately-owned operations. During the past ten or fifteen years, ECEC in other countries (Australia, the US and the UK) has become dominated by corporate big box child care operations with the capacity for aggressive growth.

These child care operations provide graphic illustrations of issues, which arise when large corporate child care businesses play a dominant role.

Edleun’s emergence in Canada establishes a much more corporate child care operation than Canadians have yet experienced. Edleun Group is linked to the failed Australia-based ABC/123 conglomerate and is now positioned to raise substantial capital funds. With this potential, Edleun has the capacity to garner a significant share of the early childhood education and care market across Canada.

Financing

Montreal-based venture capital firm San Anton Capital initially backed Edleun. It is now linked to other firms with the considerable investment capital that will allow them to grow rapidly. These include Australia’s Macquarie Bank, Texas-based Triland International’s group of companies (who have interests in Alberta’s real estate), Canada’s Reichmann Group, Vision Capital Corporation (named one of Canada’s top five hedge funds) and CIBC’s Canadian Real Estate Fund. On November 18, 2010, it announced it would enter into a $25 million credit agreement with an unnamed Canadian bank.

The Edleun Group is growing rapidly. When the firm began trading in May 2010 it had already acquired the assets of Alberta-based 123 Busy Beavers. These assets include eleven 123 Busy Beavers-branded child care centres in Calgary and Edmonton, and 123 Realco (0813594 BC Ltd.), a wholly-owned subsidiary, and the Alberta real estate interests of Learning Care Group Trust, which owned and leased facilities and/or property to some of the 123 Busy Beavers Centres.

By July, Edleun had already made an offer for a second Alberta-based chain of six centres and real estate interests. By mid September, Edleun owned 17 centres in Alberta and announced the acquisition of three more centres at the beginning of November bringing it to a total of 20 centres.

The 11 child care centres lost $2.28 million for the two years ending June 30, 2009. The notes by the accountants in the Unaudited Consolidated Financial Statement observed that 123 Busy Beavers “has a significant working capital deficiency.”

Edleun states that the company intends to “strategically pursue” the acquisition and development of child care centres across Canada. The firm’s goal is “to become the leading educational and child care provider in Canada.” Its initial target markets will be Alberta, Ontario, Quebec and BC. The company’s objectives include “the acquisition and improvement of existing child care centres and development of new child care centres across Canada.”

Edleun states that its goal is to own ten per cent of the Canadian child care “market” in the next six years. If they achieve that goal, Edleun will own more than 800 child care centres out of the current estimated 8,800 in Canada.

Mr. Wulf has a history with child-related businesses including failed global giant ABC Learning Centres/123 Global, which went into receivership in Australia in 2009. Prior to this, Mr. Wulf operated Children’s Choice, a child care chain in the US, several motor sports-dirt racing enterprises, a bakery business, a software company in Australia and several other child-related ventures.

Mr. Wulf has been involved in several kinds of child care business operations in Canada in the past three or four years. In 2007, letters seeking to acquire centres for the ABC/123 conglomerate’s Canadian arm, 123 Busy Beavers were sent to child care centres in BC, Alberta and Ontario by Leslie Wulf and Mark Davis, now Edleun’s COO, who signed the letters on the letterhead of Texas-based Adroit Investments LLC.

Ultimately, eleven Alberta centres were acquired by them and were rebranded 123 Busy Beavers managed by ABC Learning-linked personnel and used the ABCcurriculum package, Lifesmart Marnie Testa, who worked for ABC in Australia, was 123 Busy Beavers’ initial National Manager of Operations and is now Edleun’s Vice President for Centre Operations at Edleun.

The second Canadian child care venture led by Mr. Wulf was Alberta-incorporated Educare Development Group (also known as Canadian Educational Property Fund (CEPG) and Canadian Child care Educational Property Fund), whose address was listed as Plano, Texas.

According to the firm’s information, Adroit Investments and Triland International had formed Educare Development. Educare’s website (no longer available online) listed 123 Busy Beavers, 123 Global Property Ltd. and American Child care Properties as three of its four customers.

Mr. Wulf and Ted Rea of Texas-based Triland International contacted and/or met with provincial governments across Canada seeking “turn-key” child care development contracts – ‘triple net sale leaseback real estate to Child care Center operations under long term leases’ - with the object of developing, operating and leasing child care facilities – and engaged a professional lobby firm in Ontario. Although there were negotiations between Educare/CEPG and several provincial governments, no deals were reached.

Edleun Group Inc. is Mr. Wulf’s third venture into the Canadian child care field.

The Edleun Group Inc.

The Edleun Board of Directors includes:

Barry Reichmann, President and CEO of Reichmann International Development Corporation

Jeffrey Olin, President and CEO of Vision Capital Corporation

John Snobelen, Minister of Education under the Harris government in Ontario, now a Toronto Sun columnist who has written about early learning and child care

Traudi Kelm, an Alberta child care owner who also chairs the Governing Council for Accreditation for Early Learning and Care Services

Mark Davis, Wulf’s partner in acquisitions for 123 Busy Beavers and in Educare Development Inc. was initially an Edleun director but is no longer on the board. Davis is now the Chief Operating Officer of Edleun. Ted Rea, Managing Director of Texas-based real estate firm Triland International (and partner in Educare) is Edleun’s Director of Real Estate.

Edulen’s Website, www.edleun.com, is registered to Leslie Wulf. The company’s initial phone number of record (214) 717-4305 was an unpublished cell phone based in Grand Prairie, TX. The address of record is 30 Glendeer Circle SE Calgary, ABT2H2Z7 (telephone numbers are toll free: 888-808-2252 or 403-705-0362). There are two Websites: http://www.edleun.com, a parent-oriented site about centre locations and program, and http://www.edleungroup.com, an investor relations site.

TMX Equicom Group is identified handling investor relations for Edleun.

Edleun’s growth plans are to acquire existing child care that meets its criteria. All acquired centres undergo a comprehensive remodeling and upgrading process, which includes the implementation of an educational curriculum and nutritious meal programs, to ensure they consistently meet Edleun’s high standards.

With our commitment to providing quality and choice we are also actively pursuing the development of new “state of the art” child care centres in residential communities where there are no child care facilities currently & corporate care for company’s employees (http://www.edleungroup.com, retrieved September 20, 2010).

What we’ve learned

No jurisdiction in which child care is treated as a private business has a track record of equitable access or high quality while the countries in which early childhood education and care is widely accessible and meets benchmarks for quality are those that have adopted public management, public funding and public/not-for-profit operation as fundamental. Canada can learn much from comparative policy analysis about other jurisdictions’ negative experiences with big-box corporate child care. And there is substantial information about the public, not-for-profit options that benefit children and families, not shareholders.